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Rent Stabilization Commission Recommends Updating Relocation Fees

Over the course of several meetings, the Beverly Hills Rent Stabilization Commission has made a sweeping set of recommendations to the City Council for changes to the relocation fees granted to displaced tenants of rent stabilized apartments. If approved by the City Council, the changes would raise the amount of compensation granted to tenants in most cases, but would also reduce the level of compensation required of small landlords.   

Under the city’s current regimen passed in 2017, the Rent Stabilization Ordinance requires owners of rent stabilized units to provide relocation fees to evicted tenants if the landlord or his family (including spouse, children or parents) plan to live in the unit; if a landlord seeks to move a new building manager into a unit occupied by a previous building manager; when a landlord intends to demolish or move the building, or convert the unit into condominiums, stock cooperatives, or community apartments; or if a landlord wishes to do major remodeling.

In those situations, the landlord must pay the tenant a relocation fee that scales with the number of bedrooms of the unit. Disabled, elderly, or minor tenants receive additional support. Landlords must pay tenants approximately $7,000 for a studio, $10,300 for a one bedroom, and $14,000 for a two or three bedroom. Landlords must pay an extra $2,000 for disabled, elderly, or minor tenants.

Director of Community Development Ryan Gohlich offered some context to the Commission, saying that these types of evictions happen with vanishing frequency. “We have a very, very low number of relocation fees that get paid out annually when we’re not in the middle of a moratorium,” he said. “I think that number of relocation fees actually represents less than one quarter of 1% of our total RSO inventory.”

In a motion offered by Commissioner Neal Baseman at the Nov. 3 meeting, the Commission voted to recommend to the City Council “that the relocation fees be adjusted based on the formula of three times median rent for the same size unit [based on number of bedrooms], based on the city’s rent registry each July 1, commencing July 1, 2022, plus an additional $1,000 for moving expenses, plus an additional $2,000 for a household with a qualifying member, which would be a senior, a disabled member or a minor child.”

Commissioner Frances Miller, who sits on the Commission as an alternate, pushed back against the use of median rent as the metric for calculating the fees. She said that people paying lower than median rent would receive a “bump up,” while people paying higher than the median would be getting cheated. Baseman disputed this idea, saying that “a person who is paying higher rent probably could better afford to relocate than somebody who’s paying a lower rent.”  

The Commission weighed whether or not the moving expense stipend should scale with the size of the unit. While a majority of commissioners opted to maintain a flat rate, commissioners Kathy Bronte and Zachary Sokoloff held that the fee should rise with the number of bedrooms.

“I’m sorry to disagree with you,” said Bronte to Gohlich, “but I know that living expenses for a two or three bedroom or even a four bedroom apartment [are] not even close to $1,000.”

Chairman Lou Milkowski suggested that the “increased dollar amount by the number of bedrooms” could be seen as going toward moving expenses “because we’re upping the ante at each level based upon the number of bedrooms.”

The motion passed four to two, with Bronte and Sokoloff voting no.

The Commission also considered at its Dec. 1 meeting whether to recommend a reduction in relocation fees for so-called “mom and pop” landlords, or landlords who own a smaller number of units. 

Both Los Angeles and Culver City grant smaller landlords reductions in relocation fees, though each city defines mom and pop landlords differently. Culver City defines small landlords as those who own no more than three rental units both inside and outside the city and are not corporations or real estate trusts. Los Angeles, in contrast, sets the limit at no more than four units within the city and does not take into consideration properties owned outside of Los Angeles.

Before the Commission could consider the degree of reduction offered to mom and pop landlords, they first had to pick a definition. For this, Miller, a landlord herself, had to recuse herself to avoid a conflict of interest. In a motion made by Commissioner Donna Tryfman, the Commission defined mom and pop landlords as those owning four units or fewer plus a single family residence, all in Beverly Hills. 

Under the recommendations, qualifying landlords would receive a reduction of 25% in fees, which would go down to a 15% reduction in the case of tenants who have lived at a property for 10 years or more. The recommendations received a five to one vote, with Bronte voting no out of an objection to the 15% long-term tenant reduction, which she viewed as insufficient. 

The recommendations will land before the City Council in the first quarter of next year, Gohlich told the Courier. 

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